EUR/USD Price Forecast: Euro Breaks Below 1.1750 as Warsh Hearing and Hormuz Closure Revive Dollar Demand

EUR/USD Price Forecast: Euro Breaks Below 1.1750 as Warsh Testimony, Hormuz Closure, and Hot Retail Sales Revive Dollar Demand

The euro (EUR/USD) is changing hands around 1.1760, down roughly 0.25% on the session, after slicing cleanly below the psychologically critical 1.1750 handle in the American trading window as three converging forces hit the tape simultaneously. Kevin Warsh's Senate confirmation testimony is signaling a Fed regime change, the re-closure of the Strait of Hormuz is reigniting safe-haven dollar demand, and March U.S. retail sales printed 1.7% against 1.4% consensus — a meaningful upside surprise that mechanically resuscitates U.S. dollar (USD) strength after weeks of consistent weakness. The pair has been boxed into a tight 1.1750-1.1800 band for multiple sessions, and the current break lower carries the potential to morph into something more consequential if the confluence of catalysts continues leaning hawkish-dollar over the coming 72 hours. Every major variable that matters for the euro is currently aligned against it, and the numbers embedded in the tape reveal precisely where EUR/USD is likely to travel next.

The Hormuz Shock Rewriting the Dollar Narrative

Last week's brief optimism around the reopening of the Strait of Hormuz and progress on ceasefire negotiations has evaporated completely. The waterway — through which roughly one-fifth of global crude moves daily — was closed again in recent sessions, a U.S. seizure of an Iranian vessel was reported, multiple ship incidents have cascaded into the news flow, and negotiations have stalled since the weekend. Tehran is actively threatening to withdraw from future talks if its conditions are not met, against the backdrop of a ceasefire set to expire April 22. That environment is feeding directly into USD demand through the classic safe-haven channel. The DXY is pinned around 98.00-98.40, testing resistance at 98.30, and it has stopped bleeding lower precisely because the Middle East backdrop is no longer delivering clean de-escalation signals. For EUR/USD, that matters enormously — the euro's ability to press through 1.1850 toward the upper reaches of its recent range is being capped mechanically by dollar stabilization rather than euro-specific strength or weakness.

Warsh's Senate Hearing Is Recalibrating Rate Expectations Live

Kevin Warsh's confirmation hearing before the Senate Banking Committee is delivering exactly the hawkish undertone that dollar bulls were positioned for. Warsh is explicitly calling for a Federal Reserve regime change, arguing the central bank has drifted from its price-stability mandate, and he stated he does not believe in forward guidance as a policy tool. He also floated that if the Fed maintained a smaller balance sheet, rates could structurally sit lower — which in the short term reads as a commitment to ongoing balance-sheet normalization pressure. Rate markets are repricing accordingly. The 2-year Treasury yield climbed to a session high of 3.77%, up five basis points, while the 10-year sits at 4.288%. CME data now shows the market assigning over 56% probability that the Fed holds rates through the end of 2026, and roughly 40% probability that the hold extends all the way to June 2027. That is a dramatic shift from the dovish pricing embedded in FX positioning just weeks ago. With U.S. rates parked around 3.75% versus roughly 2.15% in the eurozone, the 160-basis-point interest rate differential continues to mechanically favor dollar-denominated assets. ING's Chris Turner flagged that EUR/USD could push to 1.1850 if Warsh sounded dovish — that scenario has clearly not materialized, and the opposite dynamic is playing out in real time.

March Retail Sales Crushed Consensus and the Dollar Bid Followed

U.S. retail sales for March jumped 1.7% month-on-month against a 1.4% consensus expectation, with the ex-auto component also clearing forecasts. February was revised upward to 0.7% from the initial 0.6% print. The Retail Sales Control Group — which feeds directly into Personal Consumption Expenditures calculations — ran at its own elevated pace. Strip out the gasoline-price inflation effect and core consumer demand is still running at 0.6%, which is hot by any rational measure. Year-over-year growth at 4% means the American consumer has not folded despite 24.1% gasoline price increases and the 30% Brent crude surge since the Iran conflict ignited. That reinforces Warsh's hawkish framing and undercuts any lingering case for Fed cuts in the near term. Every element of the U.S. macro stack currently leans dollar-positive, and EUR/USD has no fundamental wedge to break that pattern in the immediate term.

German ZEW Data Compounds the Euro's Structural Problem

The euro does not simply have a dollar-strength problem — it has a fundamental eurozone weakness problem layered underneath. The German ZEW Survey Economic Sentiment for April collapsed to -17.2 from -0.5 in March, a dramatic 16.7-point deterioration that signals institutional investors in Europe's largest economy are seeing risks accelerating rather than stabilizing. That print makes it almost impossible for EUR to locate a foothold, regardless of what happens on the dollar side of the equation. Markets have largely ruled out an ECB rate hike at the April meeting but currently assign a 68% probability to a June hike. ING expects the ECB to deliver that June move specifically to protect the central bank's inflation-fighting credibility. Even if the hike materializes, the transmission to EUR/USD support is modest — a 25-basis-point ECB move narrows the rate differential only marginally and does not change the underlying growth-divergence story with the United States.

Foreign Inflows Into Eurozone Assets Provide the Counterweight

One element cutting meaningfully against the bearish case: the ECB's Balance of Payments data for February revealed continued strong foreign buying of eurozone assets, with EUR 280 billion of equities and debt purchased in just the first two months of the year. U.S. TIC data does not show outright sales of U.S. long-term assets, but the scale of foreign appetite for eurozone paper suggests new capital is rotating into the bloc at the margin. That establishes a structural floor underneath the euro that limits how much aggressive downside the pair can absorb on any single session. Without that inflow dynamic, EUR/USD would already be trading closer to 1.1660 or below. The foreign-demand tailwind is precisely why the euro keeps finding bids near 1.1730-1.1744 rather than cascading to deeper support levels.

Technical Structure on EUR/USD: Trendline Intact but Momentum Fading

From a technical perspective, EUR/USD has been forming higher lows since mid-March, which tentatively establishes a short-term ascending trendline framework. As long as aggressive selling does not materialize, that structure could consolidate as the dominant chart pattern over the coming weeks. The RSI remains above the 50 level, signaling that bullish momentum has not fully dissipated, but the indicator line has started to flatten — suggesting buying pressure is losing intensity and transitioning toward a more neutral phase. The MACD mirrors that behavior, with the histogram still above the zero line but with reduced slope, indicating continued but weakening upside momentum. The near-term bullish bias remains intact as long as price holds above the 20-day exponential moving average at 1.1690 and the 50% Fibonacci retracement at 1.1744. RSI currently sits around 59, positive but not overstretched — precisely the type of reading that supports range-bound continuation rather than either breakout or breakdown.

Key Price Levels Traders Are Watching

The technical ladder for EUR/USD maps out clearly. On the upside, 1.18000 represents the critical psychological resistance — sustained trade above this zone could unlock a more aggressive bullish trend. The 61.8% Fibonacci retracement sits at 1.1823, with further barriers at the 78.6% level near 1.1936 and the cycle high near 1.2080. On the downside, the 50% retracement at 1.1744 aligns as immediate support, followed by the 20-day EMA at 1.1690 and the 38.2% retracement at 1.1665. Deeper structural protection emerges at the 23.6% level near 1.1567, with 1.15904 acting as the key medium-term floor below the main moving averages. A break below 1.1730 would expose 1.1660 as the next meaningful demand pocket. The neutral middle-ground pivot at 1.16735 aligns with both the 50- and 200-period moving averages — losing that zone shifts the broader bias clearly bearish.

The Pound Sterling Cross-Check Confirms the Dollar-Strength Regime

GBP/USD is floating around 1.3510 after a recent bounce, holding above an ascending trendline support while running into resistance at 1.3600. The UK Unemployment Rate unexpectedly fell to 4.9% in the three months to February, beating the 5.2% consensus. That should have been sterling-positive, yet GBP/USD is struggling to retain the 1.3500 handle — which tells the entire FX complex story. When a major currency cannot hold ground on positive domestic data because the dollar side of the equation is dominating, that is the clearest possible signal that the USD is the driver of every major pair right now. If GBP holds above 1.3480, the path opens to 1.3580. A break below that ascending trendline exposes 1.3400. The euro faces the identical mechanical dynamic against the dollar, and the correlation between the two pairs has tightened meaningfully in recent sessions.

Cross-Asset Reading That Confirms the Dollar Bid

The evidence for ongoing dollar strength extends well beyond the FX majors. Gold (XAU/USD) has plunged toward the $4,720 zone, extending weekly declines as USD strength and skepticism about U.S.-Iran talks combine to pressure the precious metal. The S&P 500 (^GSPC) at 7,125 and Nasdaq (^IXIC) at 24,490 have both pushed to record highs, with risk assets absorbing the dollar-strength impulse through the earnings-resilience channel rather than buckling. Bitcoin (BTC-USD) has reclaimed $76,000 on Iran-talks optimism. The AUD/USD is falling as the dollar broadens its gains. Every FX major is telling the same story: risk sentiment is bifurcated, the dollar is reasserting itself as the cleanest expression of macro uncertainty, and euro weakness is a derivative symptom rather than a root cause.

Scenario-Weighted Paths for EUR/USD Over the Next Week

Laying out the probability distribution with precision, the base case scenario weighted at roughly 55% has EUR/USD consolidating between 1.1730 and 1.1820 over the coming sessions, with intraday flushes below 1.1750 being absorbed by foreign-inflow demand but no genuine breakout in either direction. The bearish scenario weighted at roughly 30% involves a clean break below 1.1730, exposing 1.1660 as the next meaningful support, with acceleration potential toward 1.1567 if Warsh's confirmation proceeds smoothly and the April 29 FOMC delivers hawkish messaging. The bullish scenario weighted at roughly 15% requires a genuine diplomatic breakthrough on the Middle East — a verified ceasefire extension with Hormuz reopening — which would likely drag the dollar lower and push EUR/USD through 1.1820 toward 1.1850 and potentially 1.1936. The asymmetry clearly favors the downside given the current macro setup, though the foreign-inflow dynamic and the structural ascending trendline prevent a disorderly cascade.

Trade Management Framework for EUR/USD

For traders positioning around these levels, the disciplined approach involves scaling rather than committing aggressively in either direction. Short exposure activated on confirmed breakdown below 1.1730 offers targets at 1.1690, 1.1665, and deeper toward 1.1567, with stops tight at 1.1780 to limit risk. Long exposure only makes sense on a confirmed reclaim and acceptance above 1.1820, targeting 1.1850 and 1.1936, with stops just below 1.1770. The dead zone between 1.1740 and 1.1800 is where directional edge disappears — pushing trades into that chop window is a classic way to hand back P&L. The cleanest setup in the current environment is patience, letting the Warsh testimony conclude, waiting for the ceasefire resolution on April 22, and allowing the April 29 FOMC decision to deliver the macro catalyst that unlocks real directional movement.

The Calendar Stack That Will Drive the Next Move

The event risk stack over the next ten days is dense. April 21 brought ADP weekly employment data alongside the headline retail sales print and Warsh's opening testimony. April 22 is the Iran ceasefire expiration. April 23 delivers initial jobless claims and the flash manufacturing and services PMI prints. April 24 produces the University of Michigan April inflation expectations report — one of the more market-moving consumer inflation surveys. April 29 is the Federal Reserve rate decision, with the 99.5% implied probability of a hold at 3.50-3.75% meaning any surprise deviation creates outsized EUR/USD volatility. Layered across that timeline sits the Warsh confirmation vote, potential ECB commentary, and the broader U.S.-Iran diplomatic trajectory. Each one of those events carries capacity to drive single-session EUR/USD moves of 50-100 pips.

My EUR/USD Call: Bearish Short-Term, Range-Bound Over the Week

EUR/USD at 1.1760 is a tactical Sell with the defined framework of entering short on confirmed acceptance below 1.1730, targeting 1.1690, 1.1665, and potentially 1.1567 on extension. The pair rates as a Hold within the current 1.1730-1.1820 band, and upgrades to Buy only on a clean reclaim and acceptance above 1.1820. Strategically, the structural forces weigh bearish for the near term — dollar strength is being reinforced by hawkish Fed repositioning, by the Hormuz closure, by hot U.S. retail sales, and by the collapse in German ZEW sentiment. The only meaningful counterforce is foreign appetite for eurozone assets, which creates a floor but does not create momentum. The probability of a sustained push through 1.1850 in the coming week is roughly 15% — not zero, but not the base case. The probability of a test of 1.1690 or lower is roughly 55-60%. That asymmetry is why the tactical bias is bearish despite the broader ascending trendline structure remaining technically intact. The single most important variable over the coming seven sessions is the Warsh confirmation outcome combined with the April 22 ceasefire resolution. If Warsh sails through and Tehran walks away from talks, EUR/USD is heading to 1.16 with minimal friction. If the confirmation stalls on the Tillis-Powell blockade and Iran returns to negotiations constructively, the euro snaps back toward 1.1850 within 48 hours. Everything else — ECB rate expectations, ZEW data, foreign flows — is secondary to those two macro pivots. The disciplined play is patience, with a bias toward selling strength near 1.1800 and waiting for confirmation before chasing either side of the current range.

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